Internet Grants to Schools Halted as the F.C.C. Tightens the Rules
By STEPHEN LABATON
Published: October 4, 2004
WASHINGTON, Oct. 3 - Public libraries and schools around the nation have suddenly stopped receiving any new grants from a federal program that is wrestling with new rules on how it spends $2.25 billion each year to provide high-speed Internet and telephone service.
The moratorium at what is known as the E-Rate program began two months ago, with no notice, and may last for months, causing significant hardships at schools and libraries, say state officials and executives at the company that runs the program.
The suspension came after the Federal Communications Commission, in consultation with the White House, imposed tighter spending rules that commission officials say will make it easier to detect fraud and waste in the program....
***
The E-Rate program was created by the Telecommunications Act of 1996 as a way to finance telephone and Internet services for the states. The program expanded an earlier universal service program to include public schools and libraries and the Internet, giving money both for equipment and for service.
Derided by its opponents as the "Gore Tax" because it was advanced by Vice President Al Gore, the program has occasionally been attacked in Congress by some Republicans. In recent interviews, administration and commission officials denied that the changes were intended to hinder the program. But some officials have said that in tightening the rules, the government may have made unintentional mistakes....
http://www.nytimes.com/2004/10/04/business/media/04fcc.html